5 Technology Realities Shaping the Market in the Next Few Years
This article was originally published on bazaar voice
Today’s consumers are more and more connected, through an increasing number of devices. At the same time, their expectations are growing based on standards set by industry leaders and new market entrants that are, thanks to the ubiquitous connectivity, easier to connect with and adopt. Consequently, all industry sectors, especially retail, are seeing rapid evolutions that will shape the market in the next five years.
- Seamless experience: online, offline and across devices
- Dis-ownership and subscription economy
- The growth and importance of consumer-generated content (CGC)
- Emotional and logical engagement
- Co-branding and co-innovation
1. Seamless experience: online, offline, and across devices
To be successful, brands and retailers need to reach consumers wherever they are, on whatever device they may be using. Increasingly, that means mobile devices. Digital doesn’t just drive eCommerce, it drives people to the stores. And this influence doesn’t end at the entrance to the store: smartphones are the new personal shopping assistant for people once they’re inside.
Consumers are increasingly using multiple channels and multiple devices throughout their purchase journey. And these omnichannel shoppers are very valuable. According to a 2015 study by IDC, omnichannel consumers have a 30% higher lifetime value than those who shop using only one channel. However, consumers are not conscious of the particular channel they are using but are reminded that it is the case when they face limitations typically inherent to a particular channel. Ultimately, they are seeking a seamless experience. And beyond seamless, they are increasingly expecting their experience across channels to be frictionless.
The winners will create sophisticated marketing strategies geared towards enabling consumers to convert on any channel and to maintain a consistent experience when switching between channels. In order to accommodate changing consumer needs, brands and retailers will need to ensure that consumers have the right information available at their fingertips, at the right place and right time.
2. Dis-ownership and subscription economy
Eager to realize the same success as companies like Uber, Airbnb, and Le Closet, tech investors and innovators are looking toward new economic models that challenge established industry sectors – a decision driven by the fact that these innovative brand successes can happen because consumers are starting to place as much, if not more, weight on the experience as they are on the actual product. If this means not owning the product, it isn’t an issue anymore, as long as the experience is built around their needs.
At the same time, consumers’ expectations are rising. They are now looking for convenience, customer-centricity, and personalized offers. Those retailers that successfully marketed around these three pillars find themselves in a unique position to leverage customer loyalty through subscription models that are aligned with consumers’ needs and are embedding themselves in the lives of their customers by becoming a supporting partner in their day-to-day.
Brands and retailers need to consider the impact of dis-ownership on their business and create offers that are built around the customer, rather than the historical constraints of their industry. They will need to maximize the opportunities offered by subscription models so that their customer-centric offers are embedded in the lives of consumers.
3. The growth and importance of CGC: Type, Reach, Volume and Insights
As confidence in traditional advertising keeps declining, consumers will more systematically turn to content created by their peers to make purchase decisions regardless of the type of service, product or vertical. Brands and retailers will need to differentiate themselves by offering all types of content (rational, emotional, supportive, and engaging) at all engagement points.
Unlike today’s one-size-fits-all approach, consumers will expect a personalized experience. They will engage with contextually relevant advertising and personalized brand messages that include text and photos, and ignore more traditional and repetitive mass-media ads. The expectation for personalized content, and sometimes products, is already well present in the fashion industry. High-street fashion tends to be ahead in terms of innovation, but this will keep spreading to all industries. As a result, brands and retailers will need to have sufficient volume of content to drive relevance by presenting only what matters to the consumers in the specific context.
Finally, consumers’ savviness about the value of their data will become the norm. This means that consumers will only share if they feel that they get value in return. There will be increasing pressure to know your audience and your consumers beyond today’s common demographics. To remain relevant, brands and retailers will need to derive deep consumer insights from social, customer interaction and preference data.
4. Emotional and logical engagement
We know that some consumers think logically, some emotionally, and some both, at the various stages of the consumer journey. For a long time, consumers lived within the limitations of eCommerce websites. But the innovation surrounding today’s social networks allows for new interaction models that consumers use for several hours every day. The leading brands and retailers are developing differentiating experiences to win over their markets and create more loyalty, which results in consumers decreasing tolerance of limitations.
Their expectations are much higher and they have no qualms about taking their business somewhere else if they are not engaged in the correct way. This change in behavior can be felt across industries, including more traditional sectors like financial service. Everyone will be expected to reassure, help, be transparent, and inspire.
So, brands and retailers will not only need to ask themselves if they have the right content types to appeal to consumers at all stages of their journey but also what components are still required to create a successful customer engagement.
5. Co-branding and co-innovation
Thanks to YouTube, blogs, and social networks, consumers are commenting on and remixing brand messages, videos, and imagery. They tweak, re-create, and re-publish the brand message on a daily basis. The traditional notion of copyright is being challenged as the voices of consumers blend in with the marketers’ messages.
More and more, consumers feel ownership in their favorite brands and will come to their defense if the brands are under attack; reversely, they will voice their concerns publicly if they feel that their values or needs are not being respected. This represents an immense opportunity for companies to better align with their customers and make them feel part of what they are creating.
A few quick examples of how seriously brands and retailers are taking customer feedback and adjusting their offering accordingly:
- Reeboks offering fully customized shoes
- John Lewis making changes to a pillow’s feathers as a result of negative reviews
- Argos’ own products adapted based on customer feedback
- Customized teddy bears from Things Remembered
Consumers are already expecting retailers and brands to adapt to their needs and react to their feedback more systematically. For success in the future, companies will need to have a constant pulse on their customer base, offering them a platform to create and interact with consumer-generated content when and where they need it.
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